Persistent Downtrend in Gas Prices

Over the last week, wind generation in the North West European region maintained levels close to the average. To meet the energy demand across most countries, especially during peak hours, there was some reliance on gas and coal-powered generation. In France, the week was marked by temperatures that were considerably higher than what is typically expected for the season. This unusual warmth led to a reduced power demand within the country, where temperature fluctuations are known to have a direct impact on energy requirements. The average spot price in the Netherlands for the past week was recorded at €67.8 per MWh, showing a slight decrease of approximately 60 cents compared to the prices in the previous week.
The gas prices last week continued their downtrend, with the Title Transfer Facility (TTF) gas prices for March and April 2024 dropping by €2.3, settling at €24.8/MWh and €25/MWh respectively. Alongside gas, carbon dioxide (CO2) prices experienced a downturn, decreasing by €1.6 per European Union Allowance (EUA) and closing the week at €57.2/EUA. This decline in fuel costs partially contributed to lower power prices. The Dutch March 2024 baseload power price fell by €6.1 to €57.5/MWh, and the April 2024 contract decreased by €4.5, ending at €52.5/MWh.

Tennet, the Dutch transmission system operator, is exploring possibilities for constructing three 380kV high-voltage power lines in the Netherlands to connect Vierverlaten to Ens, Ens to Diemen, and Krimpen or Crayestein to Geertruidenberg. These projects, sanctioned by the Dutch climate and energy minister, aim to bolster the electricity grid in response to anticipated sharp increases in power demand and variations in supply between 2025 and 2035. The routes are subject to detailed research with multiple alternatives, aiming for completion dates between 2030 and 2033. This infrastructure development is part of a broader strategy to alleviate grid congestion and ensure reliable power supply amid growing demand and the government’s plans to initiate flexibility tenders in 2024 to mitigate overload risks in key regions by 2026.
Looking ahead to 2025, there has been a noticeable adjustment in energy prices. The gas price saw a reduction of €1, with the TTF contract closing at €28.6/MWh. CO2 prices also dipped by nearly €1.6, settling at €59.3/EUA. Concurrently, the Dutch power price witnessed a decrease of almost €2.7, ending the week at €70.3/MWh. However, the spark spread for the upcoming year showed minimal movement, experiencing a slight drop of €0.2 to reach -€5.5/MWh.